US embassy cable - 03NASSAU586

C O N F I D E N T I A L SECTION 01 OF 02 NASSAU 000586 
 
SIPDIS 
 
E.O. 12958: DECL: 03/17/2013 
TAGS: BF, ECON, EFIN, PREL, CARICOM 
SUBJECT: CARICOM SECGEN WANTS BAHAMAS IN SINGLE MARKET 
 
 
Classified By: DCM ROBERT M. WITAJEWSKI, REASON 1.5 (B AND D) 
 
Summary 
------- 
 
1.  (U)  CARICOM Secretary General Edwin Carrington, using 
fairly blunt language for diplomatic discourse, publicly 
warned The Bahamas that it needed to get in line with the 
rest of the region in regard to the Caribbean Single Market. 
He strongly implied that The Bahamas could not remain a 
member of CARICOM if it does not subscribe to the Single 
Market, which it has not to this point.  Carrington's words 
did not go over well in a country that sees little to gain 
and much to lose in a Caribbean Single Market, and could help 
spur The Bahamas to consider where its economic future lies. 
End Summary. 
 
Carrington Pressures 
-------------------- 
 
2.  (U)  Sec-Gen Carrington made his public comments at a 
seminar on CARICOM sponsored by the College of The Bahamas. 
Also speaking on the panel were Minister of State for Finance 
James Smith, attorney Reginald Lobosky, economist Gilbert 
Morris and Desiree Field-Riddley, adviser to the Caribbean 
Market and Economy. 
 
3.  (U)  Carrington called for The Bahamas, which has 
declined to participate in the Single Market to this point, 
to quickly make a decision to accede.  He said that The 
Bahamas must "move, and move swiftly."  Carrington devoted 
most of his presentation to addressing concerns most 
Bahamians have with joining the Single Market (and the FTAA, 
truth be told).  He acknowledged that, as a service driven 
economy that produces few goods for export, The Bahamas had 
comparatively little to gain from market opening in the 
region, but said that what little The Bahamas does produce is 
not competitive without that opening.  He dismissed concerns 
with the movement of skilled labor (The Bahamas, with its 
higher income levels, is a magnet for economic migration from 
the rest of the region) and the common currency (any change 
from the current one-to-one interchangeability of the 
Bahamian and U.S. dollars could lead to sharp devaluation and 
loss of wealth in The Bahamas) by saying that The Bahamas 
could always use treaty language to opt out of those sections. 
 
4.  (U)  In the conclusion of his presentation, Carrington 
turned strangely threatening, however.  He said that this is 
"a question, not just of the single market and economy 
membership, but of CARICOM membership indeed."  Carrington 
explained that the new legal structure of CARICOM requires 
that all member countries sign all agreements in their 
entirety, and that therefore, if The Bahamas reserves itself 
from the Single Market, it would be in violation of its 
responsibilities as a CARICOM member.  The audience took this 
to mean that, if The Bahamas continues to hold itself out of 
the Single Market, it could be forced out of CARICOM. 
Carrington ominously warned that, "in this day and age, for a 
small country to be on its own in international waters, is 
not the most propitious of options." 
 
Bahamian Government Responds 
---------------------------- 
 
5.  (U)  Minister Smith, in his presentation took exception 
to Carrington's depiction of The Bahamas' lack of options. 
He said that The Bahamas, contrary to what Carrington said, 
had three legal options: to join the single market, to be an 
associate member through a separate agreement, or to continue 
to opt out.  He did not respond to Carrington's threat to 
Bahamian CARICOM membership.  He and other panelists called 
clearly for The Bahamas to consider carefully its own 
economic interests before committing to the Single Market. 
Smith did acknowledge that, if the FTAA becomes a reality, 
many of the same issues would have to be addressed. 
 
6. (C)  In a March 17 meeting that Ambassador and DCM had 
with Foreign Minister Fred Mitchell, the Ambassador raised 
the CARICOM Secretary General,s public comments.  Minister 
Mitchell admitted to being &surprised8 by the Carrington 
quotes, acknowledged that they were &impolitis8 and agreed 
that they made a &tough sell (on a single market) even 
harder.8  He admitted that the Leader of the Opposition had 
also called him earlier that morning for an explanation of 
Carrington,s public comments.  The Foreign Minister said he 
was confident, however, that The Bahamas could have it both 
ways ) continue membership in CARICOM but exercise the 
reserve clause on the issues such as labor mobility. 
7.  (U)  Carrington's comments were generally seen as 
threatening and were not well received.  Leading daily "The 
Nassau Guardian" warned against precipitous action and called 
for the government to consider Bahamian economic interests 
first and to not commit fully to any organization or 
agreement that was not fully in The Bahamas' interest. 
 
BLANKENSHIP